'J.P. Morgan, Citibank will not commit to cut Iran access to markets'

J.P. Morgan and Citibank, two top American financial institutions, will not commit to cutting Iranian access to international markets, which will add fuel to concerns among US officials about efforts by European states and Tehran's regional allies to mitigate the impact of new US sanctions ahead of a November 4 implementation deadline, a report says.

Publish date : Sunday 26 August 2018 09:42

Code: 353204

The Washington Free Beacon reported on Friday that the two institutions, which sit on the board of the Society for the Worldwide Interbank Financial Telecommunication (SWIFT), which facilitates international banking transactions, were opposed to disconnecting Iran from the network.

The American conservative political journalism website, however, said the two banks declined Free Beacon inquiries into whether they intended to disconnect Iran from the network and comply with the sanctions.

According to the report, both banks could play a pivotal role in ensuring that SWIFT and its members comply with the new sanctions, which target Iran's Central Bank and critical infrastructure networks.

However, an ongoing standoff between European allies and the administration of US President Donald Trump over the implementation of the new sanctions threatens to force the two financial institutions to pick a side, the report said.

SWIFT is used by nearly every bank around the world to send payment messages that lead to the transfer of money across international borders. It provides a wide range of services including transmitting letters of credit, payments and securities transactions among 9,700 banks in over 200 countries and territories.

It became off-limits to Iranian banks in 2012 after the implementation of the US-led sanctions against the Islamic Republic. Accordingly, around 30 Iranian banks were blocked from using SWIFT services, literally cutting off Iran from the global banking system.

Iran's state-run banks rejoined SWIFT following the nuclear agreement with world powers that went into effect in January 2016.

Earlier this month, the European Union threatened to impose sanctions on companies that stop doing business with Iran in compliance with the US sanctions snapback mechanism.

Earlier this month, Trump signed an executive order, re-imposing the first round of sanctions on Iran which target the country's purchase of US dollars, trade in gold and other precious metals as well as automotive sector.

The sanctions came three months after Trump withdrew Washington from the 2015 nuclear deal with Iran despite objections from the other parties to the agreement, namely France, Britain, Germany, Russia and China, and the European Union.

In November, a second round of US sanctions will be reinstated on Iran's oil industry, the Central Bank, port operators, and the energy and shipping sectors.

Iranian officials have said the country will not give in to US pressure and rejected any offer of talks with Washington under threats.